Still Waiting For Mobile Advertising

When I asked for your opinions last week about content pricing strategies, I added that there was a need for mobile advertising systems that could help support content, and allow users free access to services, like they enjoy on the wired Web, while still providing for revenues for content and service providers.

A new report from KPMG says that 40 percent of mobile users surveyed around the world don’t want to pay anything extra for mobile multimedia content. This is a serious disconnect with thinking from operators that believes services like mobile TV will provide a serious boost to their ARPUs. Obviously, the other side of that statistic is that 60 percent of users are willing to pay a premium — but when nearly half your target market isn’t interested, there’s a problem, and a new business model is needed.

KPMG says operators should use the services as a churn reduction tool, which is maybe about half right. But, again, operators need to help create an ecosystem in which advertising can support content, so that the end user doesn’t always have to pay. Operators won’t want to eat the costs of providing content to users — otherwise they’d have done so already. They’re not looking to offer mobile television because they think it will keep people from switching to one of their rivals, as those companies will also be offering essentially the same services. They want the revenue boost.

But that revenue boost doesn’t have to come solely from user subscriptions, and there are other ways to monetize content than usage fees. Content doesn’t have to be free, either, but users don’t always have to be the ones paying the bill.

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